State seeking Bridgepoint records on sales efforts

Attorney General investigating for-profit education industry

California has asked a court to order San Diego’s Bridgepoint Education to turn over information about its sales efforts, including hundreds of thousands of recordings of telephone calls, as part of an investigation into complaints of false advertising by for-profit colleges.

The state Attorney General’s Office filed a petition in Sacramento Superior Court on Wednesday that said Bridgepoint had produced only a fraction of the information sought in a January subpoena.

According to the filing, Bridgepoint has electronically stored more than 400,000 digital recordings of telephone calls with people in California. The company has offered to produce 800 of those calls and has only produced 473 records, many that were partially redacted, the state said in the filing.

“The Attorney General requested these specific materials in order to evaluate whether Bridgepoint has violated California law by making false or misleading statements to Californians during telephone calls, including telemarketing calls, and through other sales and marketing efforts,” Deputy Attorney General Angela Muñoz said in the petition.

A company spokeswoman, Marianne Perez, declined to comment.

Officials say the state is investigating complaints that for-profit schools misrepresented themselves in sales calls to prospective students. The probe is looking into complaints about what students were told about school class credit transfers, availability of financial aid, degree completion times and cost, and graduate employment rates.

Bridgepoint operates two schools, Ashford University in Iowa and University of the Rockies in Colorado, but the vast majority of its students take classes entirely online. Ashford enrolls about 72,000 students.

Bridgepoint’s attorneys have argued that it would be “unduly burdensome” to comply with the subpoena because it would need to notify all of its students about the information being requested. It also says providing such notice would cause “reputational harm” to the company, potentially causing a “public relations disaster,” according to the state’s petition.

Bridgepoint stock fell as much as 1.4 percent on the news, but it ended up 4 cents to $16.32 on the New York Stock Exchange.

Bridgepoint in May disclosed in an annual report with the U.S. Securities and Exchange Commission that it was being investigated by the California attorney general, and that it was facing investigations in Iowa, New York and North Carolina.

Just last month, Bridgepoint’s Ashford University received initial accreditation to operate in California from the Western Association of Schools and Colleges, ending a yearlong crisis for the university after its initial application was rejected because of high dropout rates and an emphasis on recruiting new students over education.

Accreditation is required for students to qualify for federal student loans and other government financial aid. Bridgepoint received more than 85 percent of its $968 million in revenue last year from federal financial aid programs.